ARM (NASDAQ:ARM) Shares Down 1.9% - Time to Sell?

Key Points

• ARM shares fell 1.9% to $238.78, with trading volume down 60% from the average. The stock has a market capitalization of about $255 billion and trades at a very high P/E ratio of 246.
• Analyst sentiment remains positive, with 18 Buy ratings, seven Holds and one Sell; the consensus rating is “Moderate Buy” with a $285.33 price target, although individual targets range from $250 to $500.
• ARM exceeded quarterly expectations, reporting $0.45 EPS and $1.29 billion in revenue, with revenue up 22.4% year over year. However, insiders sold 22,072 shares worth about $8.5 million during the last quarter.

ARM Holdings PLC Sponsored ADR (NASDAQ:ARM - Get Free Report)'s stock price traded down 1.9% during trading on Monday . The company traded as low as $233.29 and last traded at $238.78. 3,269,135 shares traded hands during mid-day trading, a decline of 60% from the average daily volume of 8,174,105 shares. The stock had previously closed at $243.32.

Analyst Ratings Changes

Several equities research analysts recently commented on ARM shares. KeyCorp raised their target price on ARM from $300.00 to $430.00 and gave the stock an "overweight" rating in a research note on Tuesday, July 14th. Raymond James Financial reiterated an "outperform" rating on shares of ARM in a research report on Thursday, May 7th. Deutsche Bank Aktiengesellschaft reissued a "hold" rating on shares of ARM in a research note on Thursday, May 7th. Sanford C. Bernstein set a $500.00 price target on shares of ARM in a research note on Wednesday, June 17th. Finally, Rosenblatt Securities dropped their price objective on shares of ARM from $270.00 to $250.00 and set a "buy" rating on the stock in a report on Friday, July 31st. Eighteen investment analysts have rated the stock with a Buy rating, seven have assigned a Hold rating and one has issued a Sell rating to the company's stock. According to data from MarketBeat.com, ARM has an average rating of "Moderate Buy" and a consensus price target of $285.33.

ARM Trading Down 1.9%

The stock has a market capitalization of $255.04 billion, a PE ratio of 246.17, a P/E/G ratio of 7.21 and a beta of 3.90. The stock's fifty day simple moving average is $303.00 and its 200-day simple moving average is $230.18.

ARM (NASDAQ:ARM - Get Free Report) last issued its quarterly earnings data on Thursday, July 30th. The company reported $0.45 earnings per share (EPS) for the quarter, topping analysts' consensus estimates of $0.40 by $0.05. ARM had a net margin of 20.25% and a return on equity of 12.24%. The business had revenue of $1.29 billion during the quarter, compared to the consensus estimate of $1.26 billion. During the same period in the prior year, the firm posted $0.35 EPS. The firm's quarterly revenue was up 22.4% compared to the same quarter last year. As a group, analysts anticipate that ARM Holdings PLC Sponsored ADR will post 1.15 earnings per share for the current fiscal year.

Insider Buying and Selling at ARM

In other news, CAO Laura Kathleen Bartels sold 11,306 shares of the company's stock in a transaction dated Tuesday, June 2nd. The stock was sold at an average price of $392.70, for a total value of $4,439,866.20. Following the completion of the transaction, the chief accounting officer directly owned 12,135 shares in the company, valued at approximately $4,765,414.50. This represents a 48.23% decrease in their position. The transaction was disclosed in a document filed with the Securities & Exchange Commission, which can be accessed through this link. Also, insider William Abbey sold 6,566 shares of the company's stock in a transaction that occurred on Monday, June 1st. The stock was sold at an average price of $402.72, for a total value of $2,644,259.52. Following the completion of the sale, the insider directly owned 20,563 shares of the company's stock, valued at approximately $8,281,131.36. This represents a 24.20% decrease in their position. Additional details regarding this sale are available in the official SEC disclosure. Insiders sold 22,072 shares of company stock valued at $8,528,128 over the last quarter.

Institutional Inflows and Outflows

Hedge funds have recently bought and sold shares of the business. Syntax Research Inc. purchased a new stake in shares of ARM in the 1st quarter worth about $30,000. Evelyn Partners Investment Management Services Ltd bought a new stake in shares of ARM in the 1st quarter worth $30,000. Allied Private Wealth LLC purchased a new position in shares of ARM in the second quarter worth $71,000. FWL Investment Management LLC bought a new position in shares of ARM during the second quarter valued at $34,000. Finally, Cassaday & Co Wealth Management LLC bought a new position in shares of ARM during the first quarter valued at $40,000. Hedge funds and other institutional investors own 7.53% of the company's stock.

About ARM

Arm Limited NASDAQ: ARM is a global semiconductor IP company best known for designing energy-efficient processor architectures and related technologies that underpin a wide range of computing devices. Founded in 1990 as a joint venture between Acorn Computers, Apple and VLSI Technology and headquartered in Cambridge, England, Arm develops the ARM instruction set architectures and core processor designs that chipmakers license and integrate into custom system-on-chip (SoC) products. The company operates a licensing and royalty business model rather than manufacturing chips itself.

Arm's product portfolio includes CPU core families (such as Cortex and Neoverse lines), GPU and multimedia IP (Mali), neural processing units (Ethos) and a suite of system and physical IP blocks.

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